As of February 2021, THC caps for medical cannabis are up for consideration this session. Efforts in previous years to implement caps hit roadblocks in the Senate, but Senate President Wilton Simpson now suggests there is a more sustained interest this year.
To be eligible for the initial 13 licenses, the state required applicants to be an established nursery in Florida for 30 years. Highly coveted, the licenses allowed up to 25 retail licenses and unlimited cultivation and manufacturing.
Vertical integration requires each license holder to cultivate all of their product; they cannot wholesale or purchase from other producers. Over time, the state Supreme Court ruled to expand to unlimited retail locations for each license. Most of these licenses were purchased by well-financed MSOs for amounts ranging from $20-65MM.
Early lawsuits compelled Florida to add additional licenses bringing the total to 22. Challenges to the constitutionally of medical integration have risen to the Supreme court, with the court expected to rule imminently.
January 2021 | Cresco announces acquisition of Bluma Wellness Inc.
December 2020 | AYR announces acquisition of Liberty Health Services
November 2020 | Verano merges with AltMed
January 2019 | Acreage Holdings acquires Natures Way Nursery of Miami
Florida is one of the most limited and unique license structures in the industry. With only 22 vertically integrated licenses for ~22MM people and a rapidly growing patient population (4K per week), Florida licenses are among the industry's most valuable.
These licenses are unique because they can only sell what they produce, requiring a robust vertical integration from farm to flame. Trulieve is the current market leader because of its massive retail and cultivation footprints, making them one of the few retailers able to consistently offer flower on the shelves.
There is a ballot initiative to create an adult-use market in 2022 that will be a boon for existing operators with the infrastructure to supply the exponential increase in demand. We anticipate capital to continue to flow into the Sunshine State to support healthy growth in patient counts and prepare for inevitable adult-use legislation.
*22 vertically integrated licenses operate 336 dispensaries and each license can each open unlimited dispensaries.